Analysis and criticism of America's most prominent public intellectual and champion of Keynesian economics. I am part of the Austrian School of Economics, and I critique Krugman's writings from that perspective.

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Tuesday, October 25, 2011

Considering the source

It is an exciting day for Paul Krugman! His views have been endorsed by David Frum, who according to the Great One, has "wandered off the conservative reservation." That Krugman would go ga-ga over an endorsement from Frum is quite interesting, to say the least.

Frum is a hardcore, war mongering "neo-conservative," better known for his drum beating for the various U.S. wars in the Middle East. Furthermore, Frum always has been of the school of thought that wars are "good for the economy," and his main criticism of the U.S. Government has been that it is not invading enough countries, killing enough people, and taking away enough of our liberties at home.

Gee, I had no idea that Mises was a fascist. Are you saying that Mises advised him to repress Austrians? That Mises advised him to impose fascist economic measures?

The term "adviser" is a loaded one, as you need to tell us what Mises actually "advised" Dollfuss as opposed to your smear of guilt by association.

I have not said that Krugman supports wars, although he many times has said that wars do bring prosperity, and he did make the "space aliens" comment on television. All I have said is that Krugman is picking a strange person for which to bask in his praise.

Frum is not a free-market person; indeed, he is a fascist, if one uses the historical term of both military adventures abroad and government control of the economy at home. I am not out of line for bringing up this point.

Furthermore, Austria in 1934 did not have the choice between fascism and freedom, so you have presented a false choice fallacy yourself. The choices were the virulent fascism of Hitler, the less-virulent form in Italy, or outright communism from the U.S.S.R., which was utterly murderous.

None of those were good choices in terms of a free society. Mises never saw Dollfuss and the be all to end all and the ultimate in the free society, and for you to imply that is dishonest.

For that matter, your hero wrote in the German edition of The General Theory that it was easier to put his views into practice into totalitarian societies like Germany. Does that mean that Keynes was a supporter of Hitler and that he wanted to murder Jews and start wars?

Believe me, Krugman has no problem himself pointing out flaws in the character of other people. He forever tries to claim that free market people have those views because they are racists or worse.

So, if you are going to claim I am using fallacies, you might want to refrain from using other fallacies to do so.

Frum is a child of Canadian wealth. His father is a rich Toronto real estate speculator (can’t do that so much without funny money, can you?) His mother was the insufferable Barbara Frum, long time anchor of CBC’s main TV evening news program (we’ve always received CBC over the air in Detroit since the beginning of time, 1955).

Notice that I have put these two Alaskaman comments on here, which are the last he will make on this blog.

I have not banned him because he pointed out the capital gains rates in Norway and Sweden. I am perfectly happy to have a discussion on capital and incentives to invest.

However, his comments are always abusive toward me, and also toward Frostburg State, because he declares that I should not be permitted to teach there because, after all, Alaskaman decrees it.

You will notice that these two comments he makes also are abusive, and he calls me a liar and then misrepresents why I have banned him. I'm letting these comments stay so it is clear to everyone as to why these are his last ones.

Regarding Sweden and Norway, we have to remember that they might have similar welfare and tax policies, but other policies are different. Furthermore, Norway has a lot of oil income that can mask the effects of other policies toward investment.

I looked up the Economic Freedom Index, and while I always have problems with quantifying this sort of thing, I do believe that from what I can tell, Sweden has a number of things going for it policy-wise that put it ahead of the USA.

As for Norway, it would be interesting to see what would happen if the oil sector were reduced or eliminated altogether. It would be harder for the country to keep up its high standard of living and welfare state.

Anyway, here are the links to the indices. I do think they help explain some of the issues.

http://www.heritage.org/Index/country/UnitedStates

http://www.heritage.org/index/Country/Sweden

http://www.heritage.org/index/Country/Norway

But the ban on Alaskaman still stands. I'm tired of his constant abusive language. If he would just disagree, that would be one thing, but since he spends most of his time abusing me, I figure I don't have to put up with it.

LK and other Keynesian lurkers out there - a little history for those who are blind:

LK, you do not sound to be a committed socialist or anything like that, so why do you not admit who Keynes was? He was born to Marxist parents. He was a dedicated socialist himself.

Keynes, like Lenin before him, shifted the debate by arguing that since many nations were not willing to adopt socialistic government ownership of all business, the only solution was for big businesses to give people privatized “socialism” such as health insurance, savings programs (like the current 40lk), retirement programs and other employee benefits. Keynes further predicted that if government did things right, then small businesses would be increasingly less able to offer such benefits over time and that eventually big business would run the entire economy in partnership with highly-regulating governments.

Together, Keynes thought, big government and big business would phase out the disruptive, nonconformist and anti-social element of independent small business power and replace it with big corporations offering all the benefits envisioned by socialism.

Simultaneously, governments would keep mavericks, entrepreneurs and innovators from rocking the boat. Socialist goals, albeit through private corporate means, would be implemented into all capitalistic nations.

The result would be the end of warfare between owners and labor and the solution to most world problems.

Keynes said that once companies become so big that they are less focused on profits than appearing caring, helpful and socially responsible to the public, they will make decisions based on public relations and therefore socialistic values rather than making money.

If enough big companies could be coaxed to this point, and if increased government barriers to small-business success could effectively squelch entrepreneurial initiative, even the most capitalistic nations would provide privatized “socialist” safety nets for the whole society.

This is aristocracy, pure and simple.

In such a system, big corporations would work together with big governments to continually increase the delivery of socialistic goals such as:

· Free education for all

· Free health insurance for all

· Free health care for all

· A society of employees

· Jobs for everyone

· A meritocracy of experts ruling society

· A docile and obedient populace

This system was adopted slowly but consistently so that Richard Nixon could announce by the mid-1970s that “we are all Keynesians now.” Not so coincidentally, it is also pretty similar to FDR's 2nd bill of rights!

In short, Keynesianism promotes big government with high levels of regulation along with big business promoting various private offerings of socialist goals.

Finally, never forget the term: Keynesian Welfare State model. The name itself suggests Keynesianism is what we here say it is: A vehicle to facilitate passage to Marxism.

Keynesianism would not even be a blip in economic history books if it was not for the 1950s and 1960s. In the 1930s and 1940s, it was such a failure that Keynes himself told Henry Clay it was a failure in so many words (and that he was left looking for answers in the invisible hand).

At that point, Keynesianism looked dead in the water. However, the 50s and the 60s breath life in to the Keynesian school of economic thought; however not because it caused incredibly robust growth rates but was a direct beneficiary of pent up demand from the aftermath of WWII and rebuilding of Europe and Japan. 1970s however again showed Keynesianism for what it is - a roadblock for healthy growth and entrepreneurship. By 1980, it was pretty much dead in the water again and remained so until 2008.

"Gee, I had no idea that Mises was a fascist. Are you saying that Mises advised him to repress Austrians? That Mises advised him to impose fascist economic measures?"

No to both.

And you miss the whole point of my comment above.

Claiming that Mises was a fascist merely on the basis of his relationship to Dolfuss is an unsound guilt by association fallacy.

Your statement "if someone like Frum wants to endorse Paul Krugman, perhaps it speaks more to the kind of world Krugman wants us to inherit than the rightness or wrongness of his views" is as absurd as my ironic sentence "So, by all means, if someone like Dollfuss wanted to take advice from Mises, perhaps it speaks more to the kind of world Mises wanted us to inherit than the rightness or wrongness of his views."

Geez, is the ability to understand irony (in its proper definition) dead?

"As for Norway, it would be interesting to see what would happen if the oil sector were reduced or eliminated altogether. It would be harder for the country to keep up its high standard of living and welfare state. "

It would have a slightly lower standard of living and somewhat less generous (but just as viable) welfare state? - just like Switzerland, Netherlands, Australia, Austria, Canada, or Germany etc. etc.??

"It would have a slightly lower standard of living and somewhat less generous (but just as viable) welfare state? - just like Switzerland, Netherlands, Australia, Austria, Canada, or Germany etc. etc.??"

Viable? You call welfare states viable? Has Greece not taught you anything at all? Do you not see that rest of EU is only standing because they are relatively in a stronger position than Greece is, however in time they too will fail? Do you honestly think that producers of the society are stupid enough to keep on producing as they see more and more of their private property redistributed to the leaches of the society (like the OWS crowd?

Maybe you better be at OWS(or Occupy whatever city that is near you) stinking up the place with the rest of your comrades.

Now, let me also point out that Scandinavian countries have many implicit advantages over the United States. These include small, homogenous populations and stronger family structure.

If you look at just Americans with Swedish heritage vs Swedes with Swedish heritage, you find that there is a massive income gap between the two. This implies that the Welfare State has had a very large negative effect on Swedish income.

Being Canadian I will attest that our welfare state is far from viable. While our federal government's debt levels are somewhat subdued, many provincial governments are drowning in debt, in large part because of unsustainable welfare state obligations.

About Me

I teach economics at Frostburg State University in Frostburg, Maryland. We are located on the Allegheny Plateau, and we have cool summers and tough winters.
I am the single father of five children, four of them adopted from overseas and I have two grandchildren. My family and I are members of Faith Presbyterian Church (PCA).